IRS Releases Revised ‘Certificate of Foreign Status’ Form for Individuals
March 11, 2014
March 11, 2014
The IRS has issued a new Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting), which should be used exclusively for individuals. Entities documenting their foreign status, FATCA status, or making a claim for treaty benefits will use a new Form W-8BEN-E, which has not yet been finalized.
Individuals who are not U.S. citizens or resident aliens may be subject to U.S. tax at a 30-percent rate on income they receive from certain U.S. sources. These individuals can use Form W-8BEN to claim an exception from information reporting and backup withholding for certain types of income, such as financial-institution deposit interest.
The new form is very similar to the old Form W-8BEN. References to anything other than individuals have been deleted, and the new form requires the individual’s date of birth (Box 8).
For more information, see the updated W-8BEN Instructions.
Question of the Week
Q: What should be done if the direct deposit of an IRS refund went into an account that doesn’t belong to the intended recipient?
A: This will depend on where the error occurred. But in all cases, the person who received the deposit in error is not entitled to the funds.
If the credit union made the error, then per Regulation E, the credit union must correct the error.
If the IRS made the error, the person who filed the tax return needs to contact IRS customer service at 800.829.1040. The IRS will issue a recall of the direct deposit and send the return filer a new refund by check.
If the filer entered the incorrect routing or account number, the IRS assumes no responsibility for tax preparer or taxpayer errors and will not provide any help in this situation. It is the responsibility of the person filing the return to verify the account and routing number and double-check for accuracy. While the IRS suggests the filer work directly with the respective financial institution to recover the funds, the credit union also has no responsibility for the error. Due to privacy, you are not allowed to provide any information concerning the member whose account received the payment. You can work as an intermediary, but ultimately this is a civil issue between the filer and the person whose account they directed the payment be made to.
National Credit Union Administration (NCUA)
The NCUA released a video of the February board meeting.
The NCUA issued a statement regarding Call Reports. The NCUA stated that while the total number of late filers at the end of 2012 dropped, there were still hundreds of credit unions that filed their Call Reports late.
Consumer Financial Protection Bureau (CFPB)
The CFPB released a report that shows the trends of military consumer complaints.
Federal Trade Commission (FTC)
The FTC announced its 2014 schedule for reviewing regulations, which includes a review of parts of the Gramm-Leach-Bliley Act concerning safeguarding of customer information.
Internal Revenue Service (IRS)
U.S. Department of the Treasury (Treasury)
Treasury released an updated Fact Sheet regarding the final regulations for employers under the Affordable Care Act.
Federal Reserve Board (FRB)
The March edition of FedFocus is now available.
Office of Foreign Assets Control (OFAC)
OFAC has updated the SDN list as of Feb. 27. The last update prior to this was Feb. 20.
Questions? Contact the Compliance Hotline: 1.800.546.4465, firstname.lastname@example.org.
Posted in Compliance News.